IRS Tax Amnesty Programs Collects Billions
The Wall Street Journal reports that 15,000 individuals took advantage of a recent Internal Revenue program offering limited amnesty for taxpayers with undeclared offshore accounts. The deadline for the Offshore Voluntary Disclosure Initiative (OVDI) was September 9, 2011, and far exceeded the anticipated 2,000 applicants. A similar program offered in 2009 collected $2.2 billion in taxes, interest and penalties.
Overseas accounts over $10,000 held by U.S. taxpayers must be reported to the Treasury Department. Significant penalties can be assessed against individuals who fail to report and "hide" their offshore assets. The 2009 and 2011 amnesty programs allowed qualified taxpayers to declare their accounts and escape criminal prosecution. Using figures from IRS Commissioner Doug Shulman, the WSJ article estimates the average revenue per amnesty case at more than $180,000.
Tax debt is not particular to the upper income classes. Small business owners, independent contractors, and employees can also owe the IRS through either mistake or carelessness. Fortunately, there are legal solutions for a tax debt problem. In some cases, dealing with the IRS directly can resolve a tax liability issue. Examples of this are an offer in compromise or an installment agreement. In other cases the IRS will simply pursue the tax debtor through garnishment of either wages or future tax refunds. A federal tax debt can also result in seizure of personal assets or even jail for tax fraud. The tax man does not have a sense of humor.
Bankruptcy is a powerful shield in resolving federal or Massachusetts state tax debt. The bankruptcy automatic stay will stop the tax collection process and allow you time to either propose a repayment plan, or discharge some or all of the tax debt. The rules for discharging personal taxes through bankruptcy are complex and require an experienced Massachusetts attorney's assistance.
If you owe federal taxes or Massachusetts state taxes that you cannot pay, call The Law Office of Robert W. Kovacs, Jr. toll-free at (877) 315-2641 and learn how the bankruptcy laws can shield you from the powerful tax man. The Bankruptcy Code contains several provisions that can provide the honest, but unfortunate taxpayer with needed debt relief.